2026-VIL-618-CESTAT-HYD-CU
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CUSTOMS CESTAT Cases

Customs – Export of iron ore, Underpayment of customs duty, false declaration of export value - Based on intelligence information, the Department found that the appellants, who exported iron ore fines, had mis-declared the value of their export consignments, resulting in non-payment of Customs duty - Department alleged that the appellants had entered into a dummy contract with M/s Pacific Global Resources Pte Ltd., Singapore (PGRPLS) at a lower price of USD 70 PDMT, while there was another contract between M/s Rotomac Global Pte Ltd., Singapore (RGPLS) and M/s Bagadiya Brothers (Singapore) Pte Ltd. (BBSPL) at a higher price of USD 89 PDMT. The Department claimed that the differential amount was paid in cash to the appellants - Whether the Department has been able to conclusively establish that the appellants had received additional consideration over and above the declared value, warranting revision of the assessable value and consequent demand of differential duty – HELD - The evidence relied upon by the Department, such as the statements recorded under Section 108 of the Customs Act and the electronic documents, were either insufficient or inadmissible. The Department had denied the appellants' request for cross-examination of the key witnesses, which was a violation of the principles of natural justice. Additionally, the Department had failed to comply with the statutory provisions under Section 138C of the Customs Act for the admissibility of the electronic evidence. There was no conclusive evidence to establish how the differential amount was paid to the appellants, and the Department had not reopened or reassessed the shipping bills that were finalized based on the Bank Realization Certificate and other documents submitted by the appellants. Therefore, Department had not been able to conclusively establish the receipt of additional consideration by the appellants, warranting the revision of the declared assessable value and the consequent demand of differential duty - The impugned order is set aside and the appeal is allowed
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